Argentina speculates on bridge as close to July 30 as possible

Excluding local speculation, Argentina must now wait for the formal decision of the Paris Club. The June meeting of the body headed by French Finance Minister Bruno Le Maire for diplomatic reasons has not yet been dated. In these meetings called “Tour d’Horizon”, questions relating to the Club are dealt with, decisions to be taken unanimously by the 22 members; whether these creditors high or not. The operation of the Club implies that every vote is worth the same, whether the debtor state has a member as a creditor or not. Likewise, it is excluded that the main voice is carried by the supplier countries, and that before the monthly meetings within the Club, there are cross-communications on how to deal with a particular case.

In general, the resolutions are resolved before the “Round” and at the time of the vote there is no further debate on the situation of the countries. This is why it is important in the Argentinian case that the question of the “bridge” be resolved in cross-communications between the voters present virtually in the “Tour”. These are generally the ambassadors of the 22 member countries present in Paris. In the Argentinian case, the presence could be of greater added value, and the ministers or finance secretaries of the creditor states could be present when the time to raise their hand (supposedly favorable). What is certain is that these will determine the type of term or “waiver” that will be granted to the country.

The additional 60 days Argentina has from Monday (expiration date) is part of the Letter of Intent, which was signed with the Paris Club at the time and cannot be changed (and suspended) that if one of the strong creditors that the country has in this area denounces Argentina, demands payment and directly dictates the default. Since it hasn’t happened yet, it’s not supposed to. Likewise, the state that possibly claims the default would have to convince the other 21 members.

They assume from Buenos Aires that while Alberto Fernández, Martín Guzmán and the rest of the creditors show good faith and a negotiating attitude to reach an agreement with the IMF and accept at least one mission provided for in the article. IV of the statutes; of the Club none of its members will rise from the discussion table. “Less in the event of a pandemic,” they speculate from Argentina. There is a fact to be taken into account. Paris Club creditors are the same as members with greater voting rights than the IMF board. And as long as they saw that there were conversations and a spirit of agreement, the default would not be declared. For this, they say from the Casa Rosada and the Hacienda, the key will be to maintain an always constructive dialogue and to keep Kristalina Georgieva among those convinced of the local good faith.

The problem with the wait is that the country risk will continue to navigate at 1,500 points. And that on the occasion of a possible “bridge” there will be no significant losses since it will not yet be a problem solved, but postponed.